CK Hutchinson Holdings, owner of Three has been attempting to acquire O2 for some time now, with approval held off by Ofcom because it believes that the merger could be bad for competition in the UK, which is especially prevalent after the BT acquisition of EE.
In an attempt to sway the regulatory office, the network’s chairman has released an open letter to Ofcom and their customers, promising a price freeze if the merger is approved.
In the letter he promises that Three + O2 would not raise the price for customers of a voice minute, text or megabyte for five years after the merger has completed, and that the combined company will invest £5 billion in its UK businesses over the next five years.
He also claims that the quality of services would be improved faster and would be done more effectively with the two companies merged.
He then goes on to note that Three is currently the smallest operator on the market (if it was to merge with O2 it would be considerably larger), and that it needs this deal to stand up to the “new Leviathan BT.”
“Over the coming weeks the promises I have laid out will be an important part of the case Three will put to Europe’s competition authorities, who have had the wisdom not to rush to judgment until, as the law requires, they have heard our response to their concerns,” wrote Fok in the letter.
“We believe they will make the right choice for Britain, for British consumers, and for Europe.”
But if this deal is approved, the market would be left with only three major mobile networks, Three + O2, BT (EE) and Vodafone, with the other networks piggy backing off them. So it’s easy to see where Ofcom comes from.
Source: The Financial Times